Lithium Australia signs South Korea MoU

Lithium Australia (ASX:LIT) has signed a memorandum of understanding (MoU) with South Korean electric vehicle (EV) lithium-ion battery recycling company SungEel HiTech (KOSDAQ:365340). 

Lithium Australia, which has a $33 million market capitalisation says the MoU has been struck regarding an offtake of mixed metal dust (MMD) and progression of a joint development agreement (JDA), including investment by SungEel into the expansion of the former’s recycling capability and capacity. 

Concurrently, Australia Lithium’s wholly owned subsidiary, Envirostream Australia, has entered into a sales and purchase contract with SungEel to facilitate MMD sales while the offtake agreement is being finalised. 

This contract includes customary terms including MMD price mechanisms, but does not include minimum volumes. 

MMD contains energy metals cobalt, nickel, and lithium recovered from spent lithium-ion batteries at Envirostream’s battery recycling plant in Melbourne, Australia. 

Execution of a potential offtake agreement is expected to be completed by 30 June 2024, while JDA investment is scheduled for the end of 2024. The JDA is focused on upgrading recycling equipment and expanding the total processing capacity of Envirostream. 

Both the offtake and JDA are subject to negotiations and relevant approvals.

Lithium Australia CEO and Managing Director Simon Linge says: “Signing MMD offtake agreements is critical to Lithium Australia’s strategic roadmap, as it demonstrates the company’s ability to secure additional MMD customers as the collection volumes of LIBs continues to scale. 

The MoU signed with SungEel is very exciting for the growth of the company’s recycling operations. SungEel is a global leading battery recycler with hydrometallurgical capabilities, which required MMD as an input material for the extraction of high-purity battery materials. We look forward to formalising our relationship with SungEel, a valued long-term partner of Lithium Australia.” 

SungEel HiTech Vice President of Sales & Marketing Paul Yum says: “This collaboration is consistent with the key framework for strengthening the global recycled materials supply chain, and we plan to continue to make stronger partnerships with major companies in various regions, while building up strategic collaborations, which includes securing end-of-life batteries and cooperation in recycling technologies. 

We look forward to working with Lithium Australia and Envirostream to contribute to the carbon-neutral energy transition in Australia.”    

SungEel HiTech is an existing customer of Lithium Australia and has purchased most of Envirostream’s MMD since inception. 

Lithium Australia is responsible for lithium-ion battery collection and primary processing into MMD. 

As of December 2023, Lithium Australia had $4.931 million cash and cash equivalents at hand, according to its latest quarterly report.

Write to Adam Drought at Mining.com.au

Images: Lithium Australia
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.